KFM is the new advanced file manager that was implemented in html editor.
From the error, it sounds like you host has configured the server to run in safe mode. KFM is not compatible with servers running in safe mode.
you can disabel the KFM by editing the following two files:
HTMLEditor/custom/contents_insert_ContentValue1.js
HTMLEditor/custom/contents_update_ContentValue1.js
look for the following line:
if (true) {FCKConfig.Plugins.Add('kfm');}
and change it to:
if (false) {FCKConfig.Plugins.Add('kfm');}